My brother Jason Lives in Phoenix actually Peoria, AZ the real estate market is crazy there. His house value has fallen by nearly half since 2005. What is interesting about his story he lives in a huge development which transcends economic cycles and the neighborhood is so vast. There are 4000 lots in his development called Vistancia. There are so many people in the same situation. He bought his house for $320K in 2005 today it appraised for $178k. The house has fallen by $142K, almost half its value.
What it interesting about his story he look all the equity out if his house in Omaha when he sold it and put over $100K down on the house in Phoenix. Most of his neighbors did not do this. They borrowed the entire purchase price. In fact some of them were so underwater that they bought a second house in there neighborhood and told the bank they were going to rent out the new house. When in fact once they closed the moved into the house that was larger and much cheaper and fell in default on the first house. My point of all of this is the banks bear much of the burden in the whole mess for not knowing their customers.
